United States Court of Appeals
For the First Circuit
________________
No. 04-1379
ARTHUR HARVEY,
Plaintiff, Appellant,
v.
ANN VENEMAN, SECRETARY OF AGRICULTURE,
Defendant, Appellee.
_____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
________________________
Before
Boudin, Chief Judge,
Selya, Circuit Judge,
and Schwarzer,* Senior District Judge.
____________________
Paula Dinerstein with whom Lobel, Novins & Lamont was on brief
for appellant.
Susan E. Stokes, Jill E. Krueger, Farmers’ Legal Action Group,
and Joseph Mendelson III, Center for Food Safety, on brief for
Rural Advancement Foundation International-USA, Center for Food
Safety, and Beyond Pesticides, Amici Curiae.
James Handley, Handley Environmental Law, on brief for Organic
Consumers Association, Sierra Club, Public Citizen, Inc., Northeast
Organic Farming Association/Massachusetts Chapter, Inc., John
*
Of the Northern District of California, sitting by
designation.
Clark, Merrill Clark, Anne Mendenhall, Greenpeace USA, and
Waterkeeper Alliance, Amici Curiae.
Halsey B. Frank, Assistant United States Attorney, with whom
Paula D. Silsby, United States Attorney, was on the brief for
appellee.
_______________
January 26, 2005
_______________
SCHWARZER, Senior District Judge. Arthur Harvey appeals
the District Court’s grant of summary judgment to Secretary of
Agriculture Ann Veneman on Harvey’s claims alleging that multiple
provisions of the National Organic Program Final Rule (“Final Rule”
or “Rule”), 7 C.F.R. Pt. 205, are inconsistent with the Organic
Foods Production Act of 1990, 7 U.S.C. §§ 6501-6523 (“OFPA” or
“Act”).
Harvey appeals on seven of the nine counts he originally
brought. For the reasons set forth below, we affirm the judgment
on the first, second, fifth, sixth, and eighth counts and reverse
on the third and seventh counts, and we remand for entry of
judgment in accordance with this opinion.
FACTUAL AND PROCEDURAL HISTORY
I. OVERVIEW OF OFPA AND IMPLEMENTING REGULATIONS
Congress enacted OFPA in 1990 to “establish national
standards governing the marketing” of organically produced
agricultural products, to “assure consumers that organically
produced products meet a consistent standard,” and to “facilitate
interstate commerce in” organically produced food. 7 U.S.C.
§ 6501. The Act furthers these purposes by establishing a national
certification program for producers and handlers of organic
products and by regulating the labeling of organic products. Id.
§§ 6503(a), 6504, 6505(a)(1)(A). In order to be labeled or sold as
organic, an agricultural product must be produced and handled
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without the use of synthetic substances, such as pesticides, and in
accordance with an organic plan agreed to by an accredited
certifying agent and the producer and handler of the product. Id.
§ 6504; see also id. § 6505 (listing OFPA requirements for
certification). Products meeting these standards may be labeled as
such and may bear the USDA seal. Id. § 6505(a)(2).
Exceptions to the Act’s general prohibition on synthetic
substances appear on a National List of approved substances for
organic products. 7 U.S.C. § 6517. OFPA requires the Secretary to
establish a National Organic Standards Board to develop the
National List and to recommend exemptions for otherwise prohibited
substances. Id. §§ 6518(a), (k); 6517(c)(1). The Act contains
detailed guidelines for the inclusion of substances on the National
List. Id. § 6517(c).
The Act also requires the Secretary to promulgate
regulations “to carry out” OFPA. Id. § 6521. The Secretary
published the Final Rule at issue in this case in December 2000 and
it became effective on October 21, 2002. See generally 7 C.F.R.
Pt. 205. Among other things, the Rule sets forth a four-tier
labeling system for organic foods. Id. § 205.301. Under this
system, the type of labeling permitted on a product varies
according to the percentage of organic ingredients it contains.
Id. The Rule also includes loopholes concerning nonorganic
ingredients and synthetic substances, id. §§ 205.600(b),
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205.605(b), 205.606; exemptions for wholesalers and distributors,
id. § 205.101(b)(1), as well as livestock herds converting to
organic dairy production, id. § 205.236(a)(2)(i); and restrictions
on the activities of private certifiers, id. §§ 205.303(a)(5),
205.303(b), 205.304(a)(3), 205.304(b)(2), 205.305(b)(2),
205.501(a)(11), 205.501(b). These are the provisions at issue in
the present action and are outlined in more detail below.
II. HISTORY OF THE PRESENT ACTION
Plaintiff-appellant Harvey is a producer and handler of
organic blueberries and other crops, an organic inspector employed
by USDA-accredited certifiers, and a consumer of organic foods. In
October 2003 Harvey filed a complaint for declaratory and
injunctive relief under the Administrative Procedure Act, 5 U.S.C.
§§ 555(b), 702, 706(1), and under OFPA, alleging that nine
provisions of the Final Rule are inconsistent with the Act and
dilute its organic standards.
On cross–motions for summary judgment, Magistrate Judge
Margaret J. Kravchuk issued a recommended decision finding that
Harvey lacked standing to bring his seventh claim, granting Harvey
summary judgment on his ninth claim, and granting the Secretary
summary judgment on the remaining claims. Harvey v. Veneman,
No. 02-216-P-H (D. Me. Oct. 10, 2003). The District Court adopted
the magistrate judge’s recommended decision with respect to
Harvey’s first eight claims, but granted summary judgment to the
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Secretary, rather than Harvey, on his ninth claim. Harvey v.
Veneman, 297 F. Supp. 2d 334, 335 (D. Me. 2004). Harvey timely
appealed the District Court’s judgment on the following seven of
his nine original claims:
Count 1: Harvey contends that the Rule provides for the
blanket exemption of nonorganic products “not
commercially available in organic form” from the review
and recommendation process OFPA requires for inclusion of
substances on the National List, in contravention of the
purposes of OFPA and the National List.
Count 2: Harvey contends that the Rule’s provisions
allowing use of a private certifier’s seal on products
containing less than 95% organic ingredients, even though
such products may not, according to OFPA, bear a USDA
organic seal, are contrary to the purposes of OFPA.
Count 3: Harvey contends that the Rule’s provisions
permitting the use of synthetic substances in processing
contravene OFPA, which prohibits the use of synthetic
substances generally and specifically forbids the
addition of synthetic ingredients in processing.
Count 5: Harvey contends that the Rule’s exclusion of
certain wholesalers and distributors from its coverage
contravenes OFPA, which includes such entities among the
“handlers” and “handling operations” to which it applies.
Count 6: Harvey contends that the Rule’s prohibition on
certifying agents’ provision of uncompensated advice
regarding certification standards contravenes OFPA, which
prohibits only advice for compensation, and also violates
the rights of such agents and their clients under the
First Amendment to the United States Constitution.
Count 7: Harvey contends that the Rule’s provisions
allowing dairy animals being “converted” to organic
production to be fed 80% organic feed for the first nine
months of the year prior to sale of their products as
organic contravenes OFPA, which requires dairy animals to
be fed 100% organic feed for twelve full months prior to
the sale of their products as organic.
Count 8: Harvey contends that the Rule’s imposition of
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uniform standards on private certifiers contravenes the
purposes of OFPA.
DISCUSSION
I. STANDARD OF REVIEW
We review a district court’s grant of summary judgment de
novo. People to End Homelessness, Inc. v. Develco Singles Apts.
Assocs., 339 F.3d 1, 8 (1st Cir. 2003). In doing so, we draw all
reasonable inferences from the facts in favor of the appellant.
Id.
We also review de novo challenges to agency action under
the APA (that is, we do not defer to a district court’s
conclusions). Associated Fisheries v. Daley, 127 F.3d 104, 109
(1st Cir. 1997). Legal issues presented in such challenges are
“‘for the courts to resolve, although even in considering such
issues the courts are to give some deference to the agency’s
informed judgment’ in applying statutory terms if the statute is
silent or ambiguous on the issue.” Penobscot Air Servs., Ltd. v.
FAA, 164 F.3d 713, 719 (1st Cir. 1999) (quoting FTC v. Indiana
Fed’n of Dentists, 476 U.S. 447, 454 (1986)). “That deference is
described in the familiar two-step test” of Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 842-44
(1984), according to which we first use traditional tools of
statutory construction to determine congressional intent.
Penobscot Air Servs., 164 F.3d at 719. “[I]f the legislative
intent is clear, we do not defer to the agency” and simply require
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that the regulations be consistent with the statute. Id. If, on
the other hand, “the statute is silent or ambiguous with respect to
the specific issue,” the question “is whether the agency’s answer
is based on a permissible construction of the statute.” Id.
(citation and internal quotation marks omitted). We accord
deference to the agency “as long as its interpretation is rational
and consistent with the statute.” Id. (citation omitted).
II. HARVEY’S STANDING
A plaintiff bringing legal claims in federal court must
“establish standing to prosecute the action.” Elk Grove Unified
Sch. Dist. v. Newdow, __ U.S. __, 124 S. Ct. 2301, 2309 (2004).
This is partly a constitutional requirement; to meet the
requirements of Article III, a plaintiff must point to an “injury
in fact” that a favorable judgment will redress. See Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). It is also a
prudential requirement. To establish prudential standing, Harvey
must show that his complaint “fall[s] within the zone of interests
protected by the law invoked.” Newdow, 124 S. Ct. at 2309
(citation and internal quotation marks omitted).
Harvey alleges that he has suffered an injury in fact
because the challenged regulations weaken the integrity of the
organic program and the standards it sets forth. This weakening
harms Harvey as a consumer of organic foods because it degrades the
quality of organically labeled foods. The magistrate judge
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properly held that this claimed harm represents concrete,
redressable injury sufficient to confer Article III standing with
respect to most of the counts in Harvey’s complaint. It is well
established that consumers injured by impermissible regulations
satisfy Article III’s standing requirements. See GMC v. Tracy, 519
U.S. 278, 286 (1997) (“Consumers who suffer [higher costs] from
regulation forbidden under the Commerce Clause satisfy the standing
requirements of Article III.”); Baur v. Veneman, 352 F.3d 625, 628,
641-42 (2d Cir. 2003) (finding cognizable injury in fact where
consumer alleged that USDA regulations permitting use of downed
livestock for human consumption caused him increased risk of
contracting food-borne illness); Ctr. for Auto Safety v. Nat’l
Highway Traffic Safety Admin., 793 F.2d 1322, 1324 (D.C. Cir. 1986)
(finding that consumers suffered sufficient injury in fact to
challenge regulations reducing fuel economy standards “because the
vehicles available for purchase will likely be less fuel efficient
than if the fuel economy standards were more demanding”).
The magistrate judge concluded that Harvey lacked Article
III standing with respect to his seventh count because Harvey
failed to allege specifically that he was a consumer of organic
milk or inspector of organic dairy operations. Recommended
Decision on Cross-Motion for Summary Judgment, Civ. No. 02-216-P-H
(Oct. 10, 2003), at 33. But Harvey has continuously alleged, as
the magistrate judge acknowledged, that he purchases and consumes
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organic products. Moreover, the record clearly contains Harvey’s
specific allegations that he has regular commercial dealings with
organic dairy farmers and has purchased products containing dairy
ingredients identified as organic. The magistrate judge erred in
requiring more. Harvey has established that this particular
regulation threatens sufficient injury to him as a consumer.
Harvey also clearly satisfies the requirements of
prudential standing. The zone of interests test excludes only
those whose interests are “so marginally related to or inconsistent
with the purposes implicit in the statute that it cannot reasonably
be assumed that Congress intended to permit the suit.” Clarke v.
Sec. Indus. Ass’n, 479 U.S. 388, 399 (1987). Congress enacted OFPA
to establish national standards governing the marketing of organic
products, to assure consumers that organic products meet these
standards, and to facilitate interstate commerce in organic
products. See 7 U.S.C. § 6501. Harvey alleges that the Final Rule
creates loopholes in the statutory standards, undermines consumer
confidence, and fails to protect producers of true organic
products. Harvey’s alleged injuries fall precisely within the zone
of interests that the statutes at issue were meant to protect.
III. THE MERITS
A. First Count: Alleged Exemption for Nonorganic
Products Not Commercially Available
Harvey alleges that 7 C.F.R. § 205.606 permits the
introduction of a wide variety of nonorganic ingredients into
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organic or made-with-organic products in contravention of OFPA’s
general prohibition of such ingredients. The portion of the Rule
at issue provides:
The following nonorganically produced
agricultural products may be used as
ingredients in or on processed products
labeled as “organic” or “made with organic
(specified ingredients or food group(s))” only
in accordance with any restrictions specified
in this section.
Any nonorganically produced agricultural
product may be used in accordance with the
restrictions specified in this section and
when the product is not commercially available
in organic form.
(a) Cornstarch (native)
(b) Gums -- water extracted only (arabic,
guar, locust bean, carob bean)
(c) Kelp -- for use only as a thickener
and dietary supplement
(d) Lecithin -- unbleached
(e) Pectin (high-methoxy)
7 C.F.R. § 205.606 (emphasis added). Harvey maintains that the
emphasized portion of the Rule allows the introduction of any
nonorganic ingredient into processed products whenever an
individual certifier determines that the ingredient is not
commercially available in organic form. Harvey correctly points
out that §§ 6517 and 6518 of OFPA require all specific exemptions
to the Act’s ban on nonorganic substances to be placed on the
National List following notice and comment and subject to periodic
review. See 7 U.S.C. §§ 6517(a), (d), (e); 6518(k), (l), (m).
Harvey argues that the challenged provision allows ad hoc decisions
regarding the use of synthetic substances, in contravention of
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these statutory procedural requirements.
In the District Court and before this court, the
Secretary has taken the position that § 205.606 does not create a
blanket exemption, as Harvey contends, but rather permits use only
of the ingredients specifically listed in that section. In other
words, the Secretary maintains that the list of five products in
§ 205.606 is a part of the National List and that the provision
emphasized above and challenged by Harvey should be interpreted
simply as a further limitation on the addition of new nonorganic
ingredients to the National List.
We agree with the District Court that the interpretation
advanced by the Secretary is a plausible interpretation of the
language of § 205.606 that eliminates any conflict with OFPA’s
requirements. The District Court was correct to conclude that,
under the Secretary’s interpretation, § 205.606 is not in
contravention of OFPA.
However, the District Court did not clarify that it is
necessary to interpret the Rule in this manner in order to find
this portion of the Rule valid. Under other interpretations,
§ 205.606 might exceed the Secretary’s authority under OFPA. In
particular, the interpretation suggested by Harvey, although it is
at odds with OFPA’s evident requirements, is not an implausible
construction of the language of § 205.606 considered alone.
Indeed, the Secretary herself appears to have espoused exactly this
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interpretation in the past. See 65 Fed. Reg. 80,616 (“In the
regulation, a nonsynthetic and nonorganic agricultural
product . . . used as a processing aid does not have to appear on
the National List. Such products are included in the provision in
§ 205.606 that nonorganically produced agricultural products may be
used in accordance with any applicable restrictions when the
substance is not commercially available in organic form.”).
In light of this possibility, it is insufficient for this
court simply to affirm the District Court’s judgment that § 205.606
is, as it stands, consistent with OFPA. Instead, to clarify that
this portion of the Rule may not be interpreted in a way that
contravenes the National List requirements of OFPA, we remand to
the District Court for entry of a declaratory judgment that
§ 205.606 does not establish a blanket exemption to the National
List requirements for nonorganic agricultural products that are not
commercially available.
B. Second Count: Use of Private Certifiers’ Seals
on Products Containing Less Than 95% Organic
Ingredients
Harvey also challenges a part of the Final Rule
permitting use of private certification notices and private
certifiers’ seals on products containing between 70 and 94% organic
ingredients. 7 C.F.R. §§ 205.304(a)(3), (b)(2). Harvey
acknowledges that the Act allows such products to be labeled as
containing “organic” ingredients but contends that OFPA implicitly
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prohibits the certification of such ingredients or the use of non-
USDA seals on these products. In his view, such certification runs
afoul of § 6505(a)(1)(B) of the Act, which forbids labeling that
“implies, directly or indirectly, that [a] product is produced and
handled using organic methods” when it was not produced or handled
in such a way. Id. We conclude that the Act does not prohibit,
either implicitly or explicitly, the certification of organic
ingredients or the use of private certifiers’ seals and that the
challenged portion of the Rule was a permissible exercise of the
Secretary’s discretion in this area.
The provision to which Harvey objects is one aspect of a
comprehensive labeling and certification scheme set forth in the
Rule. See 7 C.F.R. §§ 205.301-205.305. This scheme provides for
four different types of product labels and for two different types
of certification, all depending on the percentage of organic
ingredients in the labeled product. The labeling scheme
distinguishes (1) products containing 100% organic ingredients,
which may be labeled “100 percent organic,” see id. § 205.301(a);
(2) products containing 94 to 100% organic ingredients, which may
be labeled “organic,” see id. § 205.301(b); (3) products containing
70 to 94% organic ingredients, which may be labeled “made with
organic (specified ingredients or food group(s)),” see id.
§ 205.301(c), and (4) products containing less than 70% percent
organic ingredients, which may identify each such ingredient on the
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label or ingredient statement with the word “organic,” see id.
§§ 205.301(d), 205.305(a)(1). Harvey does not contest these
portions of the Rule, which are plainly consistent with the Act’s
requirements. See 7 U.S.C. §§ 6505(a)-(c), 6510 (forbidding
labeling of products as organically produced unless produced in
accordance with the Act and providing that no more than 5%
nonorganic ingredients may be added to processed foods handled in
accordance with the Act, but also permitting labeling of
ingredients as organic in processed foods containing less than 94%
organic ingredients).
Harvey’s challenge is to a portion of the Rule’s parallel
certification scheme. This scheme allows (1) products in the first
two labeling categories, containing 95% or more organic
ingredients, to bear both a USDA seal and the seal of a private
certifying agent, see 7 C.F.R. §§ 205.303(b)(4)-(5), 205.311(a);
(2) products containing 70 to 94% organic ingredients to bear a
notice of private certification and the seal of a private
certifying agent, see id. 205.304(a)(3), (b)(2); and (3) products
containing less than 70% organic ingredients to bear neither a USDA
seal nor that of a private certifier, see id. § 205.305(b). Harvey
specifically objects to the second of these categories. He
maintains that “the Act’s limited exemption for identifying organic
ingredients does not authorize the certification of products which
do not meet the requirements of the Act” and that allowing
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certification of such products misleads consumers, in contravention
of 7 U.S.C. § 6505(a)(1)(B).
We note again that Harvey does not challenge the third
tier of the Rule’s labeling scheme, which allows products
containing 70 to 94% organic ingredients to be labeled “made with
organic (specified ingredients or food group(s)).” 7 C.F.R.
§ 205.301(c). Rather, Harvey’s challenge is to the use of private
certification notices and seals on such products. His argument
that use of private certifiers’ seals to designate the presence of
organic ingredients in a product contravenes OFPA depends on two
related premises: (1) that the Act allows for only one kind or
level of certification, namely, USDA certification, which cannot be
uncoupled from private certification, and (2) that the Act does not
contemplate the certification of ingredients or the use of private,
non-USDA seals to indicate their certification.
Neither premise is supported by the Act itself. First,
the Act does expressly restrict use of the USDA seal, see 7 U.S.C.
§ 6505(a)(2), and contemplates an extensive role for private
certifying agents in implementing the Act’s requirements.1
1
See, e.g., 7 U.S.C. §§ 6502(3)-(5) (defining “certifying
agent,” “certified organic farm,” and “certified organic handling
operation”), 6503(d) (providing for certification of farms or
handling operations by agents), 6506(a)(4)-(6) (providing for
periodic review of organic programs by certifying agents), 6513(a)
(providing for submission of organic plans to certifying agents),
6514(a)-(c) (addressing accreditation of certifying agents),
6515(a)-(j) (setting forth “[r]equirements of certifying agents”),
6516(a)-(b) (addressing peer review of certifying agents),
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However, it is silent on the use of private certifiers’ seals and
on the standards for inclusion of private certification information
on product packaging. Since the Act does not address private
certification at all, it necessarily cannot address whether private
certification may be uncoupled from USDA certification.
Second, the Act does provide for the identification of
ingredients as organic when a product contains less than 95%
organic ingredients, id. § 6505(c)(1)-(2), but it is silent on
whether such identification may or may not include certification of
such ingredients as organic and/or a private certifier’s mark. In
other words, with respect to products containing less than 95%
organic ingredients, the Act speaks only to the labeling portion of
the tiered scheme described above. With respect to certification
of products in this category, the Act is silent.
Since the Act is silent on these issues, we must conclude
that Congress committed the questions to the Secretary’s discretion
and assess the challenged portions of the Rule for their
reasonableness in light of OFPA’s overall scheme. Penobscot Air
Servs., 164 F.3d at 719; see also United States v. Haggar Apparel
Co., 526 U.S. 380, 392 (1999) (“If . . . the agency’s statutory
interpretation fills a gap or defines a term in a way that is
reasonable in light of the legislature’s revealed design, we give
6518(b)(7) (setting aside seat on the National Organic Standards
Board for a certifying agent), 6519(d)-(e) (addressing violations
reported and committed by certifying agents).
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that judgment controlling weight.” (citations and internal
quotation marks omitted)).
The challenged regulations are reasonable in light of
OFPA’s overall scheme. The Act clearly authorizes the use of the
word “organic” on the packaging of products made with 70 to 94%
organic ingredients. 7 U.S.C. § 6505(c)(1). Under the Act,
certifying agents play a crucial role in determining whether an
ingredient derives from an organic operation. Id. § 6503(d).
Given these statutory directives, the Secretary’s requirement that
labels on third-tier products (containing 70 to 94% organic
ingredients) identify the agent responsible for certifying such
ingredients is not unreasonable. This information allows the
Secretary to identify and track certifiers on a product-by-product
basis, creates consumer confidence that the specified ingredients
are indeed organic, and provides the name of the certifier, which
may be useful to some consumers. Far from contravening the Act,
the certification requirement furthers its purpose of assuring
consistency. See id. § 6501 (stating purposes of OFPA).
Nor is it unreasonable for the Secretary to permit
inclusion of private certifiers’ seals on such products. Such
seals will tend to increase consumer confidence and to facilitate
interstate commerce in organic products, furthering two of OFPA’s
three goals. See id. Harvey and the amici argue that the presence
of a non-USDA seal on some products will confuse consumers.
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Consumers might be confused by the presence of USDA seals on
products containing 70 to 94% organic ingredients. See id.
§§ 6505(a)(1)(B), 6505(a)(2), 6510(a)(4). But it is difficult to
see how a non-USDA seal applied in compliance with the challenged
provisions could create similar confusion, particularly since the
seal will be accompanied by labeling stating not that the product
is “100% organic” or “organic” but merely that it is “made with
organic (ingredients).” Under these circumstances, a private
certifier’s seal appearing alone on a label serves simply to
reiterate the identification of the agent certifying the
ingredient. Harvey points to no support, statutory or otherwise,
for his contention that the identification of an ingredient as
“organic” is somehow less confusing to consumers than
identification of a private certifier or use of such a certifier’s
seal, yet such a distinction is crucial to his argument. Because
we can see no basis for the distinction, we reject the inference.
We conclude that the District Court did not err in
upholding the challenged portions of the Final Rule as permissible
exercises of the Secretary’s authority. We therefore affirm the
District Court’s judgment on this count of Harvey’s complaint.
C. Third Count: Use of Synthetic Substances in
Processing
Harvey next challenges two parts of the Rule permitting
synthetic substances to be used in processed organic foods.
7 C.F.R. §§ 205.600(b), 205.605(b). Section 205.600(b) provides
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that synthetic substances may be used “as a processing aid or
adjuvant” if they meet six criteria; § 205.605(b) lists thirty-
eight synthetic substances specifically allowed in or on processed
products labeled as organic. These provisions, Harvey contends,
contravene the plain language of OFPA, which provides that
certified handling operations “shall not, with respect to any
agricultural product covered by this title . . . add any synthetic
ingredient during the processing or any postharvest handling of
this product.” 7 U.S.C. § 6510(a)(1). Harvey is correct; the
challenged regulations lie outside of the scope of authority
granted the Secretary by OFPA.
The Secretary conceded before the District Court that
§ 6510(a)(1) constitutes a “general prohibition” against adding
synthetic ingredients in handling operations. The Secretary
argues, however, that § 6517 of the Act, which directs the
establishment of the National List and governs the creation of
exemptions from the Act’s general prohibitions, allows the listing
of synthetics for use in the handling of products labeled organic.
We reject this argument. Section 6517 plainly forbids the use of
synthetic substances in handling operations. This section provides
that
The National List may provide for the use of
substances in an organic farming or handling
operation that are otherwise prohibited under
this title only if . . .
(B) the substance--
(i) is used in production and contains
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an active synthetic ingredient in
the following categories . . .
(ii) is used in production and contains
synthetic inert ingredients that are
not classified by the Administrator
of the Environmental Protection
Agency as inerts of toxicological
concern; or
(iii)is used in handling and i[s]
non-synthetic but is not organically
produced. . . .
7 U.S.C. § 6517 (emphases added). This section contemplates use of
certain synthetic substances during the production, or growing, of
organic products, but not during the handling or processing
stages.2 The challenged regulations, which permit the use of
certain synthetic substances “as processing aids,” thus contravene
the plain language of this section of the Act as well.
The Secretary notes that some subsections of § 6517 refer
to “farming or handling” activities together, and the Secretary
claims that this language renders the Act ambiguous or
inconsistent, permitting the Secretary to draft a reasonable
reconciliation. We reject this characterization of the Act.
Section 6517(c) clearly establishes a three-prong test for
exemption of otherwise prohibited substances and their inclusion on
the National List. Prong (A), not quoted above, sets forth
requirements that any otherwise prohibited substance, whether used
2
See 7 U.S.C. § 6502(8) (defining “handle” as “to sell,
process, or package agricultural products”), (18) (defining
“producer” as “a person who engages in the business of growing or
producing food or feed”).
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in production or handling, must meet to be exempted.3 Prong (B),
quoted above, specifically requires that substances used in
handling be nonsynthetic. Prong (B) is not inconsistent with prong
(A); it merely sets forth more specific requirements with regard to
the types of substances that may be used in production and
handling, respectively. The Act is neither ambiguous nor
inconsistent; § 6510 bars addition of “any synthetic ingredient
during the processing or any postharvest handling of the product,”
and § 6517 furthers that prohibition.
The challenged regulations are contrary to the plain
language of OFPA and therefore exceed the Secretary’s statutory
authority. See Chevron, 467 U.S. at 842-43 (“If the intent of
Congress is clear, that is the end of the matter. . . .”). We
therefore reverse the District Court’s grant of summary judgment to
the Secretary on this count.4
3
This subsection requires such substances to be “not . . .
harmful to human health or the environment”; necessary to
production or handling of an agricultural product “because of the
unavailability of wholly natural substitute products”; and
“consistent with organic farming and handling.” 7 U.S.C.
§ 6517(c)(1)(A)(i)-(iii).
4
We note that in his brief, Harvey admits that he has
withdrawn his challenge as to some of the thirty-eight substances
listed in 7 C.F.R. § 205.605(b) because use of the substances is
required by other statutes. Our reversal of the District Court’s
judgment is without prejudice to any such concessions made by
Harvey or to the general principle of 20 U.S.C. § 6519(f), which
provides that OFPA is not to be interpreted to alter the
Secretary’s authority under other statutes.
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D. Fifth Count: Exemption of Wholesalers and
Distributors from Certification Requirements
Harvey next challenges 7 C.F.R. § 205.101(b)(1), a
portion of the Final Rule that excludes from the Act’s coverage and
requirements “handling operations” selling products that are
“packaged or otherwise enclosed in a container prior to being
received or acquired by the operation” and that “[r]emain in the
same package or container and are not otherwise processed while in
the control of the handling operation.” Id. § 205.101(b)(1)(i)-
(ii). According to Harvey, this provision impermissibly excludes
wholesalers and distributors, a subset of those engaged in
“handling operations,” from certification and other OFPA
requirements. But, Harvey argues, OFPA expressly exempts from its
certification requirements only one subset of those engaged in
“handling operations,” namely, retailers who do not process the
foods they sell. 7 U.S.C. §§ 6502(9), (10). According to Harvey,
the Act cannot be read to permit the additional blanket exemption
of wholesalers and distributors.
OFPA’s exclusion of final retailers from its coverage
shows that Congress knew how to exclude operations otherwise
subject to the Act and must be presumed to have acted deliberately
when it did not specifically exclude those that handle only
packaged products. See id. That, however, is not the end of the
story. Section 6510 of the Act specifies the requirements for
certification of handling operations. Id. § 6510. Each of the
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seven subsections of § 6510 prohibits either the addition of
contaminants or exposure to contaminating materials. Id.
§ 6510(a)(1)-(7). The evident purpose of this section is to ensure
that operations handling organic products will not contaminate or
expose to contamination those products. But operations handling
only packaged products (as defined in the regulation) do not
present the contamination hazards at which this section——and hence
the certification process——is aimed. Thus, certification is
irrelevant to those operations that handle only packaged products.
The statutory definition of handling operations in
§ 6502(10), on its face, appears to include operations handling
only sealed packaged products. But the requirements for
certification of handling operations in § 6510 appear to have no
application to operations handling only sealed packaged products,
which by their nature could not engage in any of the proscribed
activities. This portion of the statute therefore lacks coherence
and consistency, creating ambiguity concerning Congress’ intent.
See, e.g., Barnhart v. Signmon Coal Co., Inc., 534 U.S. 438, 450
(2002) (holding that inquiry as to statutory ambiguity ceases “if
the statutory language is unambiguous and the statutory scheme is
coherent and consistent”) (internal quotation marks and citation
omitted); Salinas v. United States, 522 U.S. 52, 60 (1997) (noting
that in order for a statute to be considered unambiguous, “[i]t
need only be plain to anyone reading the Act that the statute
-24-
encompasses the conduct at issue”) (internal quotation marks and
citations omitted); Brown v. Gardner, 513 U.S. 115, 118 (1994)
(“Ambiguity is a creature not of definitional possibilities but of
statutory context.”) (citation omitted). Because “the statute is
silent or ambiguous with respect to the specific issue,” the court
must defer to the Secretary’s reasonable interpretation of the
statute. Chevron, 467 U.S. at 843-44. We therefore affirm the
District Court’s grant of summary judgment to the Secretary on this
count.
E. Sixth Count: Prohibition on Uncompensated
Advice from Private Certifiers
Harvey also challenges 7 C.F.R. § 205.501(a)(11)(IV),
which prohibits certifying agents from “giving advice or providing
consultancy services, to certification applicants or certified
operations, for overcoming identified barriers to certification.”
Harvey contends, first, that this regulation clearly conflicts with
7 U.S.C. § 6515(h), which bars certifying agents only from mixing
advice with financial interest:
Any certifying agent shall not–-
(1) carry out any inspections of any operation in
which such certifying agent . . . has, or has
had, a commercial interest, including the
provision of consultancy services;
(2) accept payment, gifts, or favors of any kind
from the business inspected other than
prescribed fees; or
(3) provide advice concerning organic practices or
techniques for a fee, other than fees
established under such program.
Id. Harvey argues further that even if the relevant portion of
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OFPA is ambiguous, deference to the Secretary’s interpretation as
embodied in the portion of the Rule at issue is not warranted,
because this regulation raises serious constitutional questions in
that it conditions receipt of a public benefit——USDA
accreditation——on the relinquishment of free speech rights. See
Legal Servs. Corp. v. Velazquez, 531 U.S. 533, 544 (2001).
In connection with the first of these arguments, Harvey
specifically contends that § 6515(h), titled “Conflicts of
interest,” constitutes the complete list of certifier activities
banned by Congress and may not be interpreted to bar activities not
involving financial benefit to the advice giver. But as the
Secretary points out, the statute is not quite so narrowly focused;
it also bars inspections when the certifier “has had” a commercial
interest in an operation and prohibits inspectors from accepting
“favors of any kind.” 7 U.S.C. § 6515(h)(1), (2). As its title
suggests, the subsection regulates conflicts of interest and
certifier integrity generally. It neither addresses nor excludes
the question of whether the provision of free advice may risk a
conflict of interest.
Since the statute is ambiguous on this point, we reach
step two of Chevron and must defer to the Secretary’s
interpretation if it is reasonable. Chevron, 467 U.S. at 843. We
conclude that this interpretation is reasonable. It is easy to
imagine situations in which providing free advice might create a
-26-
conflict of interest for a certifier; the Secretary outlines a
scenario in which a certifier provides well-meaning but erroneous
advice on compliance with the Act to a producer, then later is
faced with a choice between reporting the producer’s violation and
recanting the erroneous advice, a step that could injure the
certifier’s own reputation and credibility. Section 6515(h) is
concerned with ensuring certifiers’ integrity and avoiding
conflicts of interest. It does not preclude the Secretary from
imposing additional requirements tending to achieve these ends.
The challenged regulation is therefore neither inconsistent with
the Act nor an unreasonable interpretation of the Secretary’s
authority.
Harvey argues that if we find the statute ambiguous on
this point, any Chevron deference due the Secretary’s
interpretation is offset by the requirement that we construe
statutes, where possible, to avoid conflict with the Constitution.
See Rust v. Sullivan, 500 U.S. 173, 190-91 (1991); see also U.S.
West, Inc. v. FCC, 182 F.3d 1224, 1231 (10th Cir. 1999)
(“[D]eference to an agency interpretation is inappropriate not only
when it is conclusively unconstitutional, but also when it raises
serious constitutional questions.”). According to Harvey, the
challenged regulation raises a substantial constitutional question,
since it conditions receipt of a government benefit on speech
restrictions.
-27-
In making this argument, Harvey relies primarily on Legal
Services Corp. v. Velazquez, 531 U.S. 533 (2001).5 In Legal
Services Corp., the Supreme Court invalidated restrictions on the
speech of attorneys representing welfare claimants in a government-
funded legal services program. The Court noted that the challenged
program “was designed to facilitate private speech, not to promote
a governmental message,” and contrasted it in this regard with the
program in Rust v. Sullivan, 500 U.S. 173, in which the government
“used private speakers to transmit information pertaining to its
own program,” a program of federal funding for family planning
clinics. Legal Servs. Corp., 531 U.S. at 541-42 (citation and
quotation omitted). The Court in Legal Services Corp. emphasized
that “when the government disburses public funds to private
entities to convey a governmental message[, as in Rust], it may
take legitimate and appropriate steps to ensure that its message is
neither garbled nor distorted by the grantee.” Id. at 541 (quoting
Rosenberger v. Rector & Visitors of Univ. of Va., 515 U.S. 819, 833
(1995)).
The present case is clearly more nearly analogous to
5
The Secretary argues that the constitutionality of the
regulation should instead be analyzed under Pickering v. Board of
Education, 391 U.S. 563 (1968), because certifiers are government
employees. Pickering is not appropriate to analysis of this
regulation, since certifiers are not by definition government
employees or recipients of government funds. See 7 U.S.C. § 6514
(setting forth requirements for accreditation as applicable to both
State officials and “private person[s]”).
-28-
Rust, in which the Court found that speech restrictions did not
create a constitutional problem, than to Legal Services Corp., in
which the Court found that they did. In OFPA, the government has
not created a program to facilitate private speech, as in Legal
Services Corp. Instead it has created a scheme that uses private
certifiers to transmit information regarding the national
certification program, a clear example of a “governmental message.”
Legal Servs. Corp., 531 U.S. at 541; see also Rosenberger, 515 U.S.
at 833 (“we have permitted the government to regulate the content
of what is or is not expressed when it is the speaker or when it
enlists private entities to convey its own message”).
The limitation at issue, as discussed above, is a
reasonable addition to OFPA’s provisions for minimizing certifier
conflicts of interest. We conclude that it is also an appropriate
restriction on speech within OFPA’s scheme and raises no serious
constitutional difficulties. We therefore affirm the District
Court’s grant of summary judgment to the Secretary on this count.
F. Seventh Count: Conversion of Dairy Herds to
Organic Production
Harvey also challenges a portion of the Rule creating an
exception to the Act’s requirements for dairy herds being converted
to organic production. 7 C.F.R. § 205.236(a)(2)(i). OFPA provides
that “[a] dairy animal from which milk or milk products will be
sold or labeled as organically produced shall be raised and handled
in accordance with this title for not less than the 12-month period
-29-
immediately prior to the sale of such milk and milk products.”
7 U.S.C. § 6509(e)(2). The challenged rule, in contrast, provides
that
when an entire, distinct herd is converted to
organic production, the producer may:
(i)For the first 9 months of the year,
provide a minimum of 80-percent feed that is
either organic or raised from land included in
the organic system plan and managed in
compliance with organic crop requirements; and
(ii)Provide feed in compliance with
§ 205.237 for the final 3 months.
7 C.F.R. § 205.236(a). Section 205.237, referred to in the quoted
portion of the Rule, provides that “[t]he producer of an organic
livestock operation must provide livestock with a total feed ration
composed of agricultural products, including pasture and forage,
that are organically produced and, if applicable, organically
handled.” Id. § 205.237 (emphasis added). The reference to a
“total feed ration” of organically produced feed products indicates
that livestock must ordinarily be fed 100% organic feed to qualify
as part of an “organic livestock operation.”6 Id. Under the
challenged regulation, a converting dairy herd must be fed this way
for only three months. In contrast, under § 6509(e)(2) of OFPA,
dairy animals must be “handled organically” for a full twelve
6
This interpretation of “total feed ration” is consistent with
the legislative history of OFPA. See S. Rep. No. 101-357, 1990
U.S.C.C.A.N. 4656, 5222 (“Livestock must be fed 100 percent
organically grown feed. . . . [Dairy] livestock [must] be raised
according to all of the above standards for . . . not less than one
year.”).
-30-
months before their products may be labeled organic. In other
words, OFPA clearly requires a single type of organic handling for
twelve months before sale of dairy products as organic, 7 U.S.C.
§ 6509(e)(2), whereas the Final Rule requires two different levels
of organic feed during that twelve-month period, 7 C.F.R.
§ 205.236(a). The statutory and regulatory directives directly
conflict on this point.
The Secretary admits that OFPA requires dairy livestock
to be fed organically produced feed for the twelve months before
their milk is sold as organic. See 7 U.S.C. § 6509(e)(2). The
Secretary characterizes the challenged regulation, which provides
for a phased conversion process, as an “exception” to this
requirement. The Secretary justifies this exception through a
twofold argument for the validity of § 205.236(a): (1) OFPA is
silent on the question of dairy herd conversion, so the Secretary
has freedom to promulgate reasonable regulations on this subject;
and (2) even if § 6509(e)(2) of the Act is construed to govern the
conversion of dairy herds, the Act does not specify the meaning of
the term “handled organically,” so the Secretary may fill this gap
with a reasonable interpretation, such as that contained in
§ 205.236(a) of the Rule. We reject both arguments.
First, the twelve-month requirement of § 6509(e)(2) has
little meaning if it does not govern situations in which a dairy
animal is being “converted” to organic production, and nothing in
-31-
the Act indicates that the standards for organic production are
different for entire herds than for single animals. Reasonably
construed, OFPA sets forth clear requirements for dairy herd
conversion in § 6509(e)(2), and the Secretary may not promulgate a
regulation directly at odds with those statutory requirements.
Second, while the Act itself does not define “handled
organically,” the Secretary appears to have filled that gap with
respect to the feed provided dairy animals in § 205.237(a), which,
fairly construed, requires 100% organic feed. This interpretation
is consistent with Congress’ intent as expressed in the legislative
history of OFPA. See S. Rep. No. 101-357, 1990 U.S.C.C.A.N. 4656,
5222. Even if the meaning of “handled organically” remained
unclear, it would be impossible to reconcile the phased conversion
process set forth in the challenged rule with the one-step process
that § 6509(e) of the Act sets forth. Nothing in the Act’s plain
language permits creation of an “exception” permitting a more
lenient phased conversion process for entire dairy herds.
The Secretary’s creation of such an exception in the
challenged provision of the Rule is contrary to the plain language
of the Act. See Chevron, 467 U.S. at 842-43. The District Court
was in error in concluding otherwise, and we therefore reverse its
judgment on this count of Harvey’s complaint.
G. Eighth Count: Prohibition on Distinct Private
Certification Standards
Harvey’s final challenge is to a provision of the Final
-32-
Rule that prohibits a certifying agent from
requir[ing] compliance with any . . .
practices other than those provided for in the
Act and the regulations . . . as a condition
of use of [the agent’s] identifying mark:
Provided, That, certifying agents certifying
production or handling operations within a
State with more restrictive requirements,
approved by the Secretary, shall require
compliance with such requirements as a
condition of use of their identifying
mark. . . .
7 C.F.R. § 205.501(b)(2). Harvey argues not that this regulation
contravenes any specific provision of the Act, but that its
limitation on more stringent private standards is counter to the
purposes of OFPA. Specifically, Harvey maintains that the
limitation will suppress competition among users of organic
production and handling methods, create consumer confusion, and
limit consumer choice. Harvey also argues for the first time on
appeal that the regulation impermissibly regulates commercial
speech and is therefore unconstitutional.
In fact, the challenged regulation does not frustrate the
purposes of the Act; it furthers them. Congress clearly set forth
OFPA’s purposes in the Act itself. The aim of the system
established by the Act is, in part, to help “establish national
standards governing the marketing” of organic products and to
“assure consumers that organically produced products meet a
consistent standard.” 7 U.S.C. § 6501. The Act accordingly calls
for the establishment of a national organic production program and
-33-
national standards for organic production, id. §§ 6503, 6504, and
provides that products may be labeled “organically produced only if
such product is produced and handled in accordance with this
title,” id. § 6505(a)(1)(A). OFPA further provides that State
certification programs may be more restrictive than the federal
program. Id. § 6507(b)(1). This provision, incidentally, allows
for the type of competition developing more stringent organic
standards sought by Harvey.
The Act is silent, however, on the issue of more
stringent private standards or certification requirements, just as
it is silent on the use of private certifiers’ seals. Since this
is a matter on which Congress did not speak, Chevron requires us to
assess whether the challenged regulation is a reasonable
interpretation of the Act. Chevron, 467 U.S. at 843. We conclude
that it is. As noted above, the Act’s provision for more stringent
State standards allows for the kind of competitive advancement of
standards Harvey desires. Additionally, as the Secretary points
out, nothing in the challenged regulation prevents private
certifiers from making truthful claims about the products they
certify; it only bars such certifiers from applying more stringent
requirements as a condition of use of their USDA-accredited
certifying mark. This ban is a reasonable means of furthering the
Act’s concern with consistency.
We decline to consider Harvey’s constitutional argument.
-34-
Harvey concedes that he did not raise the issue before the District
Court but argues that our consideration of it is warranted under
National Ass’n of Social Workers v. Harwood, 69 F.3d 622, 627-29
(1st Cir. 1995). In Harwood, we noted that we countenance
consideration of arguments not raised below when six factors
“heavily preponderate in favor of” considering them. Id. at 628.
It may be appropriate to consider an omitted argument when it (1)
is “purely legal in nature and lends itself to satisfactory
resolution on the existing record without further development of
the facts,” (2) “raises an issue of constitutional magnitude,” (3)
“is highly persuasive” or threatens a “miscarriage of justice” if
not addressed, (4) does not threaten prejudice or inequity to the
adverse party if addressed, (5) was omitted inadvertently, and (6)
“implicates matters of great public moment.” Id. The issue here
is purely legal and constitutional, satisfying the first and second
Harwood factors, and it may have been omitted inadvertently,
satisfying the fourth, but Harvey does not argue convincingly that
failing to reach the claim will threaten a miscarriage of justice
or that the issue is one of great public moment. See id. (noting
that the “great public moment” factor is “perhaps most salient”).
On balance, the factors do not preponderate heavily in favor of
considering the question.
The provision at issue is a reasonable interpretation of
a matter on which the Act is silent, so it was a valid exercise of
-35-
the authority delegated to the Secretary by the Act. We therefore
affirm the District Court’s grant of summary judgment to the
Secretary on this count.
CONCLUSION
We REMAND the first count of Harvey’s complaint to the
District Court for entry of declaratory judgment clarifying the
permissible interpretation of the regulation at issue in accordance
with this opinion.
On the second, fifth, sixth, and eighth of Harvey’s
counts, we AFFIRM the District Court’s grant of summary judgment to
the Secretary.
On the third and seventh of Harvey’s counts, we REVERSE
the District Court’s grant of summary judgment to the Secretary and
REMAND the counts to the District Court for entry of summary
judgment in Harvey’s favor.
The parties shall each bear their own costs.
-36-
Harvey v. Veneman
Court: Court of Appeals for the First Circuit
Date filed: 2005-01-26
Citations: 396 F.3d 28
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